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Brazilian Finance minister ensures that interest rates will fall only after the downgrade of the fiscal balance

Brazilian Finance minister Joaquim Levy said last September that interest rates in Brazil will start to fall when the federal government gets to balance the public accounts. According to Levy, the improvement, from the fiscal point of view, will lead the return of inflation to the center of the goal marked and the credit and investment recovery.

“The consequence of fixing the fiscal side is that the economy will be relaxed. Everyone wants to see the interest rates’ fall. But, if we don’t fix the fiscal side, that is very unlikely to happen” said the Minister. According to Levy, is essential to look at the tax issue from a realistic point of view, and he referred to other countries in which, following the fiscal adjustment, a demand growth happened.

The minister also remarked that the business community and the society are expecting the decrease of the turbulences to reactivate investments. He said that the Ministry is implementing a plan to adjust the economy, starting with the fiscal adjustment, followed by reduction of interests and, finally, the expansion of investment and credit supply.